At a meeting in Bern on 19 January 2023, Werner Luginbühl, the head of Elcom, Switzerland’s electricity regulator, called on the sector to be careful to manage consumer expectations, reported RTS.
According to Luginbühl, many consumers are confused by Switzerland’s rising electricity prices. Some think the electricity consumed in Switzerland comes from hydro and nuclear production where production costs have been unaffected. This understanding does not fit with rising prices – up on average by 27% since last year – leaving people confused.
In reality, there is a significant mismatch between Switzerland’s production and consumption. While the amounts of electricity produced and consumed in Switzerland over a year are roughly the same, imports and exports are significant. Switzerland exports power over summer and imports power during winter. Much of the power imported over winter is produced by burning gas and is sold at prices set by the European market for electricity, according to Luginbühl. Exceptionally high market prices are driven by exceptionally high gas prices and not by fears of an electricity shortage, he said, implying that even higher gas prices in 2024, should they materialise, could push European and Swiss electricity prices higher.
An unusually mild winter so far has helped Europe add to its gas stockpile. By 1 January 2023, 83.5% of EU gas storage was filled, according to Reuters. In addition, France recently started exporting electricity again, reported franceinfo. At the end of August 2022, 32 of France’s 56 reactors were offline, according to radiofrance.